Closing Bell - Closing Bell: Market Damage Behind Us? 4/14/25

Episode Date: April 14, 2025

Is the bulk of the market damage behind us amid all of the tariff twists and turns? We discuss with Solus’ Dan Greenhaus, Robinhood’s Stephanie Guild and Invesco’s Brian Levitt. Plus, top chip analyst Stacy Rasgon from Bernstein tells us which semi stocks could benefit the most from President Trump’s new tariff exceptions. And, JPMorgan’s Matt Boss tells us which names he’s betting on in the retail space right now. 

All right guys thanks so much. Welcome to Closing Bell. I'm Scott Wabner live from Post Nine here at the New York Stock Exchange. This Make or Break Hour begins with President Trump's trade war and how to trade these still uncertain markets. We'll ask our experts over this final stretch that very question. In the meantime we're showing you the majors with 60 to go and regulation we have been mostly green. It's been a bit wobbly at times though even with those tech tariff exceptions. Apple getting back above three trillion in market cap. We continue to watch that. It's been uneven trading to say the least though around the edges. Several of the mega caps are lower in fact in the session today. Bond yields

well they are a bit calmer. That's helping things a lot. The dollar still weak. Yet another traditional safe haven not working out so well, so we're watching all of that. It does take us to our talk of the tape, tariff, twists and turns, and whether the bulk of the market damage is now behind us. Let's first go to Washington on that story because it does continue to evolve.

Our Megan Casella is there with the very latest time, Megan. Hey Scott, so exemptions are really the name of the game today. A lot of optimism and some speculation about which industries might be next to see some relief. The president was asked earlier today what products he might be considering for potentially temporary tariff exemptions. Here's what he said. Looking at something to help some of the car companies where they're switching to

parts that were made in Canada, Mexico and other places. And they need a little bit of time because they're going to make them here, but they need a little bit of time. So I'm talking about things like that. So sending auto stocks higher there. The president was also asked whether Apple might see any additional relief and he replied, quote, Look, I'm a very flexible person. So not closing the door on additional relief there. All of this coming after Trump issued exemptions for a number of mostly consumer tech goods over the weekend. The question now, Scott, is how long relief will last and whether and

how quickly these goods might face separate tariffs. The White House does continue to warn us that those will be coming soon. Scott. Okay, Megan, thank you very much for the latest there. That's Megan Casella. Now let's bring in Dan Greenhouse of Solace, Stephanie Guild of Robinhood, Brian Levitt of Invesco. It's great to have everybody with us today.

Dan, from your notes, you suggest that a lot of the worst case scenarios are already priced into this market. Yeah, on the halftime show, you talked about how everyone is cautious and worried. Yeah, you're not? No, I'm not. I'm sure I'm cautious. I'm not worried. And I think what Megan brought up today, he mentioned some of the auto parts, imports might be exempted from tariffs. That's like 5% of all the stuff that we import are auto parts. And I think Brian and I were talking in the green room before this, and I was saying, you have now had exemptions on a number of items, you have had the 90-day delay, et cetera,

et cetera. Clearly, this is a president who seems willing to hear from people around him and not push unimpeded into, quote, unquote, worst-case scenarios. And I think it speaks to some of the rebound that you've seen in the stock market. But I mean, Morgan Stanley today says, quote, investors should prepare to be fooled many more times. They allude to the consistent inconsistencies. Yeah.

Listen, they have been consistently inconsistent. I would concede that point. I think where I have differed on the show and in private with some of our investors is just everybody everywhere is assuming not the worst, but something closer to the worst than the best. And I think my thought was there would be a delay. My thought was there would be exemptions. And this I think is true for a lot of people, at least at Solace.

I just think everyone is inundated right now, both in newspapers, on television, with just these terrible scenarios where prices are gonna skyrocket, cats and dogs living together. And those scenarios are more likely than not not going to come to pass. All right, Stephanie, Morgan Stanley today maybe agrees a little bit with Dan

in fact that the worst may be over. But even if it is, they suggest we're not out of the woods just yet. How do you see the current environment? Yeah, I think it's kind of awkward because I think we broke up with a bunch of countries, but we're still living together. And we need to kind of figure out how we're going to, you know, are we kind of starting to talk again?

Should we actually get back together? And what terms? And I think that's what that's why the caution still exists. We're definitely managing portfolios such in a way that we've taken some dry powder and put it to work last week, but we also started, we haven't fully removed it because we think diversification is important, not only away from the dollar,

but also just being cautious and balancing between low volatility stocks and growth stocks, and really just kind of watching closely. But there is a put now. I think that's been confirmed and that's actually really helpful. But that you suggest is not the Fed and it's not the president, it's the bond market. The bond market put for sure. And that's why I think there's still some exemptions coming out because the 10-year

hasn't come down, right? The dollar being weak and the 10-year staying where it is is not a great sign. You agree? I mean, that's the old James Carville line of wanting to come back as the bond market so he can intimidate everybody. So we saw that. I think the challenge is, I want to be where Dan is. I do.

The challenge is we just, the uncertainty persists here. And I agree that, you know, given those initial formulas we saw on the tariffs, that was going to be the worst of it in terms of the tariff rates. But the challenge we have now is, how long does this bout of uncertainty go? We're very much more than ever on the whims of the White House right now than we are in a traditional environment. But I think the issue you have, the royal you have as an investor, is there isn't always clear lanes.

It's not always Apple's EPS is going to go up 8% a year in perpetuity. It's all good. There are periods of uncertainty in which risk premiums on assets go up, and those are the times when you want to take advantage of them. Now, admittedly, to your point, and the point both of you raised, there's a lot of uncertainty out there that we don't know. Tomorrow we could wake up and it could be 400 tariffs on everybody just because. And I get that. But these are the moments where long term opportunities

present themselves. And it is when uncertainty is typically at their highest or at least higher. Well, now, so if you consider the 2018 scenario, 2018, you fall 20% in a quarter, you get a 90 day trade pause. So that starts to sound familiar. You also get a Fed that steps in and that starts to help. So you shift to a better picture. The challenge I'm talking about though is that when you look at business investment or business confidence or Michigan consumer confidence, this could go on a while. I think the risk to all of this is that S&P 500

multiples are not at average. They're not at recession level. So there's a risk to this. Yes, I want to be in the camp that we've seen the worst and but but we've got to set a rate and move forward. I think earnings growth is too high still. It's like at 11 percent. Expectations. Right, expectations I should say. Not what it's definitely going to be. And every time the GDP falls by one percent, it's about a four percent drop in earnings growth over time, if you look back over the last 30 years. So I think the 11 percent expectation is still a bit too high. And that's where I think like that's why I'm so cautious. Well, to your points, and JP Morgan makes this case as well today, that according to them,

the valuation level of the market now is one that you would see at the start of a downturn rather than at the end. Yeah. So if, in fact, we are going to have a more meaningful downturn, then valuations need to correct a fair amount more than where they are now. But the counter to this, by the way, fair point on JP Morgan's part. I assume that's DuVroco, but fair observation on JP Morgan's part. However, this is the argument against valuation that's been for several years now, which is

the market has been rerating higher for a number of reasons. It's more asset light, it's more tech heavy, blah, blah, blah, blah, blah. So the market as a whole can't really be compared to its level on a valuation perspective 10 years ago, 20 years, 30 years ago. Now, that said, valuation is still too high if you think we're going into a bear market. That's correct. My point, again, is, I think the president has given us enough reason to believe that the Liberation Day anarchy that we saw, for lack of a better word, 100 percent tariffs

on everybody in Los Alamos, we're never gonna import diamonds again, that's probably not gonna come to pass. And I imagine over the next 90 days, not that we're gonna break out to new highs, because I think that's probably limited to Krensky's point and a number of other people's point. Talking about not a V-shape.

Not a V-shape, unless you get some immediate deals, so to speak, of credibility with Japan, with Europe, with Mexico, etc. You make the analogy of this, you know, we're down this road, there's always something that sort of gets in the way. But I'd say in prior bouts of tumult in the market, you can get on the shoulder, you can maybe hit an off ramp and then you can come back on and you feel like the road is OK. This has been, well, you get on the shoulder and then you come back and then they throw the spikes

across the road just when you thought the road was going to be well traveled again. Yeah, that's fair. And again, to be clear, I think, you know, Steve Weiss mentioned last week he was at the Deal Max Conference. I was there also. Thousands of middle market P.E. people,

Belsky and I were both there speaking. There's a lot of uncertainty out there. And someone had asked Belsky and I a question, which was effectively, is this sort of like 9-11 or other deviations in history where tomorrow does not look like yesterday? And I think that's fair. The world is probably gonna be different

over the next 10 years, at least from a trade standpoint, as it's been over the preceding 10 years. However, again, US companies have throughout history figured out a way to make money in all these environments. And once we do know the rules of the road, which again, I expect to be unfolded over the next 90 days, let's say, or 88 days, whatever it is, we're going to be able to perform well enough in that environment because U.S. companies have told me for decades that they're able

to do that. Scott, and that is the critical point. I mean, I think that we're all sitting here expecting that over time equity markets will go higher, right? In the long term, we're all dead, also, Cain said, right? Because they do. They do. But what you're dealing with right now is we don't know the rules of the game, and we may not know them for a while. When you think, we've now moved in from a correction into more of a market that's feeling like a bit of a crisis environment. How do you get out of crises?

You get out of crises with a better policy response, whether we saw that in 08 with TARP and a zero interest rate policy, whether we saw that in 2020 with significant support from the administration. So what we're grappling with here is we're all waiting for the policy response. But when that policy response comes,

but when, no, when it does and it will and it's gonna be in the form of some deals or something, the market and investors are gonna act like those kids in the movie theater when Chick and Jocky Joe. Yeah, I don't disagree with that. But you mean a fiscal policy response? I don't disagree with that. Because I don't think a Fed policy

is gonna response gonna come like it has the last couple of times we had a market pullback. No, it would have to be on the trade side. Neil Koshkari told us the other day that at least from his point of view, should the Fed step in to correct a rate dislocation if it's on the part of global investors reallocating their portfolios in light of new information.

He did raise the possibility that they wouldn't accommodate that. Well, I mean, there was more Fed speak today in which Waller sounded at the ready even though they think that you're going to be transitory on on some of the tariff inflation. Steve Leishman, our senior economics correspondent, is going to bring us up to date on exactly what these Fed speakers are saying today. And I think that's the gist I got was that they're ready to cut if they can.

And they think at least Waller does that inflation's not going to be or the tariffs are not going to be a reason why they can't. Yeah, I'm going to call it the any which way you can Waller cutting scenario. He did raise some hopes of raise cuts. Scott's saying he's thinking about a small and a large tariff scenario and sees rate cuts under likely under both scenarios. Here's his large tariff scenario where the 25% average tariff remains, which is kind of where we are now. He said he would expect the economy to slow

significantly. Peak inflation would be 5% unemployment around 5%, maybe greater, but rate cuts could come sooner in that scenario. Now, let's look at the smaller tariff scenario, which he says could be around 10%. Peak inflation would be around 3%. It still have a negative impact on growth and employment, and rate cuts could be on the table for the latter half of 2025. He called the new tariff policies, quote, one of the biggest shocks to affect the U.S. economy in many decades. The key to the idea that they could cut keeping inflation expectations under

control. We got some news on that real quickly. The New York Fed's consumer expectation survey today. Now note, this is taken before the latest tariff announcement ended March 31st. You can see there the survey big jump in the one year, but the three in the five year are

pretty much are well contained. Not true for the University of Michigan survey taken later, which showed that big spike. The survey found average Americans more worried about unemployment than they have been since the pandemic. And then here are the probabilities, Scott, for your conversation there. Looking at a first cut in June, a second cut in July, and a third cut come October at 63%. I don't know, Scott, if Waller kind of disagrees with Powell,

maybe more on the outlook and the idea that he's much more confident that the tariff impulse will be a one-time inflationary effect. The expectations that you just showed in the market, did those tick up at all on Waller? And I would also come back to you on, Remember that time, I believe it was gosh, it feels like it was almost a couple of years ago at this point where Waller spoke and it didn't necessarily match up in what perhaps the Fed chair himself was thinking at the time. I can't remember

the specific incident exactly the words that he used, but there was a time a couple of years ago when Waller sort of stepped out on the edge of the plank and was willing to say things that maybe some others were not. Yeah, I don't think that Waller is in line with what I'm hearing the majority is right now, Scott. I'm hearing a lot of guys, a lot of the Fed folks saying, you know what, I'm a big wait and see person here.

And it's interesting because there's a theoretical construct to the Fed talking hawkish right now. And it's as follows. Whether or not tariffs create second order effects in inflation has a lot to do with how the Fed controls inflation expectations. So just to give you this double reverse psychology story, if the Fed talks tough now, they could keep those tariffs from becoming second-order effects. This is something that's been talked by Kevin Warsh. Powell

laid down the marker on that on his speech, I don't know if it was two Fridays ago or one Friday ago. We can keep time anymore when he said the Fed has an obligation to make sure there aren't second round effects of tariffs here. So that's part of the tough talk part of the the jawboning that the Fed is going to do here to keep it from becoming a wider inflation problem. But what is widely believed here, and this is where I think

maybe I disagree a little bit with my good friend and colleague Dan Greenhouse, is that everybody's looking for a negative impact from these tariffs, either both from the amount of the tariffs and the uncertainty. You can imagine capital investment at this point, Scott, being really frozen. And Waller talked about that as if it is already occurring, that people cannot move forward with either reshoring or cannot move forward with capital investment plans in the absence of any stability at all in policy. Steve, thanks as always.

Steve Leesman, our senior economics correspondent. Steph, I'll just give you a chance to respond to that, and that, you know, Waller sounds like he's close to being ready, willing, and able, despite what's happening with tariffs and fears about inflation, which he declares today, at least in his mind, is probably transitory. I guess I heard him sort of the same way

I think people should be investing now, is like diversifying his opinion. I think he sort of said both things, which is like, well, if this happens, we should do this. If that happens, we should do that. I actually I think he doesn't know like the rest of us and so that he's sort of just saying like it's a possibility we could cut or not depending on what the data bears out. But they are definitely watching the data and not going to act first. I'm glad that you you say the word diversifying. data and not going to act first, I think. I'm glad that you say the word diversifying. Not talking about the market, but that's the direction that I'm going to take it because

it's a perfect segue for me to get there. The idea of diversifying through this level of volatility, the traditional portfolio 60, 40 stocks bonds, the idea that bonds are no longer working in the current environment because we're watching yields go up when in fact they probably should be going down relative to the economic picture to which Tony Pascarello of Goldman also opines on that in his note. In the context of traditional 6040 strategies, recent weeks have demonstrated the lack of insurance afforded by the bond market. This is a sea change from the correlation regime that dominated most of the past two decades. Do investors need to rethink that dynamic,

the correlation and the quote unquote insurance that has traditionally given investors a place to have that level of comfort? Certainly being called into question, but I think what we're all recognizing and we had talked about earlier with the put is that when there is disruption in the bond market you are likely to see central bankers step in to assure the liquidity in it. If you are worried about duration this is something we haven't said in a while is be on the the shorter end of the curve if you are

worried about longer duration securities going up. The other thing about diversification is people were overexposed to a handful of names. Now, I think a lot of us had hoped that this is the year of broadening markets because we were going to get a better growth backdrop around the world. Europe could participate value stocks. We got that relative outperformance, just not necessarily the way that we wanted to. So for our conversations about valuations, you want to bring valuations down in the portfolio. Things like equal weight, things like mid caps, value securities,

European equities are not particularly overvalued. In fact some of them like mid caps have opened up a discount. And you were talking or certainly alluding to the over concentration incentration in your mind in mega caps, for example, which are a bit uneven today, obviously. Apple getting a lift as you would expect, but still many questions exist around these tariffs, the exceptions, what still might be coming. Our Steve Kovach is following that for us today.

How are you thinking about this and the way you're speaking to viewers, the investing community today? Yeah, Scott, and the president's not speaking to viewers, the investing community today. Yeah, Scott, and the president's not doing anyone any favors today either, because in the Oval Office, he kind of hinted that more tariff relief might be coming for Apple. He mentioned Tim Cook and Apple by name,

and then yesterday we got those comments from him about no one's going to be off the hook for this. But look, here's where things stand right now. As of Friday night, Apple has dodged the worst of these reciprocal tariffs. That means the 145 percent tariffs in China they were staring down. Those are down to 20 percent, and that is where we were before so-called Liberation Day happened.

And we're back to this puzzle now of how Apple can mitigate the impact, and that means the same themes that we've been talking about for the last several days here. That means diverting iPhone production to India. That means playing around with pricing a little bit. And also just maybe, you know, working more within China to mitigate some of those, the perception that they have there among their local consumers. So there are, more tools are back in the toolkit, Scott,

for Apple to work around this kind of thing. But we still are the next beat in this story is going to be what the prices look like. When do we see price increases on the iPhone? Do we see price increases on the iPhone and what other products look like? That is still the big question, but the market you can see is with Apple up nearly 4% now,

they're taking this as the status quo, I guess, if you will, that the tariff exemptions are here to stay despite kind of the mixed messaging from the White House, Scott. Maybe, you know, not the worst case scenario envisioned, at least Friday up a lot, today up a lot, back above $3 trillion. And we shall see. Steve, thanks as always. Steve Kovach, let's wrap this up on the desk.

You can apply it on Apple specifically as a stock, but I mean more, especially the mega caps, which your firm is not a huge player in, but it does have an outsized, take on where this market probably goes. No, but I think Steve hit the important, first of all, Apple's gonna shift a bunch of production to India.

We know that it has been happening, it's gonna keep happening. They're gonna, the goal of this, we're attacking everybody all at once is going to shift a bunch of production to India. We know that it's been happening, it's going to keep happening. The goal of this, we're attacking everybody all at once, so to speak, but the goal of this is obviously to reduce the global reliance on China. And Apple is part of that story right now in terms of shifting smartphones towards India. But I think Steve made the important point about why Apple might be up today, which is that people are looking, and it alludes to the point I made earlier, people are looking

at the delay to the tariffs for these items specifically, and not necessarily thinking they stick forever. But again, it's a window into the idea that maybe the worst won't be, and so we can see a way out of the forest. And I think that's the important takeaway for investors, not the specifics, because we know sectoral tariffs are coming down the pike. We haven't heard about pharmaceuticals yet. That's our largest single import item.

But again, from an investment standpoint, we went from this is all going into place, we're going to tank the universe to now exceptions are being rolled out. And that's a positive. You you guys are in a quiet period at Robin Hood. But can you give us any sense of the psyche of your users on how they're currently viewing what's happened in this space and how they might think that it's an opportunity or not? Yeah, we had, I'd say Tesla and Nvidia continue to be the most traded names.

They're the most popular in our platform. But broadly speaking, last week when we had things paused, you saw a bunch of money go into just broad-based indices because I think they were you know that was just like let's let's jump in now because that that obviously shifted things for their psyche retail hanging in I mean that's a that's a key part of this entire dynamic that we're trying to figure out too yeah the retail retail business has been hanging in although if you look at some of the survey data investors are getting increasingly bearish,

but they're not necessarily doing it with their they're not following through with their with their pockets. I think they I think they're probably in dance camp in some instances expecting a little bit of a better outcome than we have right now and probably trying to hang in what people do a little bit of that FOMO moment. They don't want to miss out on what the upside could be. All right guys we'll leave it

there. Dan Stephanie and Brian thanks so much. We'll see all of you soon. We're just getting started here up next to star chip analyst Stacey Raskin standing by. We'll get his take on semi

stocks. They are right in the thick of it today. Back after this. Welcome back we're going to go to Christina parts of novelist now for a look at how the chip stocks are faring in today's session. We're all trying to figure out you know from the mega cap tech names to the chips, what the impact here is going to be.

Yeah, and right now they're all, like Apple, moving higher despite the White House warning of an upcoming semiconductor tariff investigation. Notable exceptions right now include TSMC, Marvell, Broadcom. They're lagging behind the sector, but almost every other chip name in the Vanek SMH is higher. Intel jumping about 3% on news. It's selling a majority stake of its Altura programmable chip business for nearly $4.5 billion.

The deal actually values Altura at $8.75 billion, which is roughly half the $17 billion Intel paid back in 2015. But it does provide much needed cash for this, I guess I should say, looming or increasing expenses for the chip maker. And Nvidia trading flat right now after detailing its $500 billion commitment to American AI infrastructure, including Blackwell chip production in Arizona and AI supercomputers in Texas. The questions, though, remain about how much manufacturing is actually going to shift to the United States as the semiconductor supply chain remains heavily concentrated in Asia.

Scott? Christina, thank you for that. Good setup, Christina Parts-Nevulis. Now let's bring in the top chip analyst, Stacey Raskon of Bernstein. He's here, Post9. Nice to see you in the house. Good to be here.

So how are you thinking about all of this? What may be today might not be tomorrow. How do you model against that? Well, that's the thing. It's hard to model because frankly, I don't know what the policy is going to be tomorrow or next week or next month or next year. It's gonna be very interesting, not just for me,

but also for the companies. Earning season starts kind of this week and gets going next week. And there's big questions like, how are these companies going to guide? Do you think they are? I mean, how can they? I mean, it depends on the company, you know?

But yeah, I think we probably want them to say something, but they probably don't have very much visibility at all. And it's actually really interesting when you think about some of the whipsaw and the policies. I mean, I could argue that it might even drive upside in the near term as companies go and try to stockpile in front of potential tariffs that they may get. But if you see upside because of stockpiling, nobody's going to pay for that.

It brings risk into the back half. And frankly, you're talking about all this manufacturing kind of moving around. Nobody really knows how this is going to end up. So it's just a big hot mess for everybody right now, myself included. The president's saying that the tariffs on imported semiconductor chips are coming soon. Yeah. I mean, imported semiconductor chips like everything. Yeah, yeah.

The direct impact, as long as they leave it just on the semis, is probably not that big. And we can talk about some other ways it could be, but the U.S. only imported last year about $45 billion of raw semiconductors into the U.S. And that's not a trivial amount, but it's not a massive amount. Again, most semiconductors enter the country inside other things, like smartphones and

PCs, which, as of right now, have some tariffs, but not the reciprocal tariffs for now. Those have been postponed. But the direct impact on semiconductors, if they do tariff, I'm assuming the tariff is not massive, if it's 10 percent or 20 percent, we can probably live with that. Frankly, semiconductor pricing on average is up 50% over the last five years anyways. If there's anything that has pricing power, they probably do. What is realistic in the way we should think about the volume that we can eventually make

here versus what we're importing overseas and the kind of timeframe that you're thinking about? For semiconductors or for the stuff that they go into? Semiconductors. Yeah. So we were already doing some of that, right? I mean, frankly, I know Trump doesn't really like the CHIPS Act, apparently, but I would argue the CHIPS Act has actually been successful in its goals, which was to get some of these semiconductor manufacturing projects actually started here in the U.S.

And it was happening. TSMC is investing a ton in Arizona. It was $65 billion. Now it's potentially $165 billion. Intel, I know they've had issues and they've postponed some of their projects, they just don't have the volume right now, but they're looking to invest in Ohio and New Mexico and Arizona, so these projects were already happening. Now, if you're asking how quickly can we duplicate the entire infrastructure that is in Taiwan

in the U.S., I would say, you know, 10 years to never, right? That's a big ask, but I don't know that we have to do that. Not everything is necessarily as strategic as that. Getting some of these high-end leading-edge projects started here and getting some of that capacity here, I think can happen in the relatively near to medium term. Even TSMC is already running wafers in Arizona. We're gonna ask you, what does that mean

for someone like Taiwan Semi? Well, again, they're actually operational in Arizona. Nvidia even talked about them today. Nvidia is gonna try to bring AI data center construction and operation back to the US. A big piece of that is TSMC. I think they even said in their press release that they are operating, they're running wafers and making blackwell chips or GPUs at Nvidia Arizona right now. Who's the biggest potential loser?

Why is Micron up? Why is Nvidia up? And why is Broadcom down? Today, that's a good question. I'm not actually sure. I've been running around all morning. It's been down for most of the day. The market's clearly making a bet

that whatever's happening and whatever terrorists might be on the cover not going to be good for Broadcom. It sticks out like a sore thumb today. If I had to speculate today, and again, I don't know, but if I had to speculate, I might say, well, if Nvidia is going to be doubling down in GPUs here, there's this whole, like, broader argument around GPUs versus custom ASICs for AI, and so maybe that's part of it. If Nvidia is going to be doubling down here, maybe people are sort of reading that as negative for ASICs. I actually think, by the way, that's the wrong question

right now. Presumably, if you're invested in AI, you still believe we're early. If we're still early, I think they can both benefit. If we're not early, they're both screwed. Well, let me ask you about this though. What if we're neither early nor late? We're just delayed because now you have all this uncertainty introduced. And the comment that I think it was Nadella made last week

alluding to the fact, well, all this spending is good and it's going to stay on target, but of course it's related to macro events. I'm paraphrasing, of course, but that's basically what he said. Isn't there risk in that? So there's risk for everybody. That's not an Nvidia or a broad-com question. Semiconductors are macro-related, right? I mean, the correlation to GDP is very high.

And in a recession, semiconductors tend not to do all that well. Now, I might argue that, at least for AI spending, that may be something that continues to get prioritized, particularly as it relates to productivity enhancements and things like that. And I would also say, as it relates to all of the uncertainty around tariffs, at least for AI servers, there has been another avenue. There's the Mexico route through the USMCA. The AI servers, as far as I can tell are compliant. And if they're coming in through Mexico,

which a lot of them do in the US, they are tariff free as of this point. You ever think about lastly, you know, private equity, for example, is investing heavily in data center. Yeah. Do you think ever about, because of macro, a slowdown in the build out of data center,

therefore the need for fewer chips than you once thought in the nearer term? Again, I think the macro issues are a broad concern on semiconductor. I do not think to the extent that you might worry about them for Nvidia or for data center that they are isolated to that. If we go into a global recession,

then I think all bets are off, but I think that's a true statement everywhere. It's not isolated to data center. There was also a belief that semis sort of went into the fog first or they anticipated the fog. They just didn't trade well. And now maybe they'd come out first. Yeah.

I mean, the issue there is we were coming off the other side of the COVID bender, right? I mean, we were in the hangover stage of the build and the bust for semiconductor. And the worry now, again, is is like what does all this mean? Are we going to see is there more pull for it? Is there more delays? It is a big fog as you say.

I don't think anybody knows but semiconductors were already into these parts of semiconductors were already into the downturn phase. This may extend it. I don't know. I don't think anybody knows at this point. Good to have you on the desk today. It's always good to be here. All right.

That's Stacey Raskin joining us right here at Post 9. Up next the top retail analyst on the street, Matthew Boss, will tell us about the stocks he is seeing the most opportunity in amid this turbulence. We're right back after this. We are back. Retail stocks coming off a rough first quarter, getting hit hard amid this recent market volatility because of tariffs. That sector down nearly 17% year to date.

Joining me now with his playbook and top ideas for the landscape is JP Morgan's Matthew Boss. It's nice to see you. You too, Scott. I'm gonna take issue with something I'm reading here from the notes that you gave our producers. Retail fundamentals remain broadly on track.

Higher income consumer as healthy and lower income consumer remaining resilient. I think some of the commentary that we've been hearing from the street would beg to differ. Look, if you're looking at the screens in all the red, you certainly would think that. But the reality looking at the data, our contacts, and we had 30 companies in New York just last week for our retail conference. It's not the case. You have not seen retail bend as of yet.

You're seeing a higher income consumer, nearly 50 trillion of wealth creation since 2019. They're still spending and they're still spending at a pretty robust level. The low income consumer with multiple years of wage increases is resilient. Now you're seeing shifting within there. You're seeing trading down that's happening with the dollar stores and the off-pricers. You're seeing best in class brands take share from some of the tertiary brands.

And now the next leg is obviously going to be navigating the playbook from a sourcing perspective. But I do think that retail broadly, and again, from a winners versus losers perspective, is going in on level footing. I mean, there's the wealth effect, though, like you talk about on the way up, but obviously there's a dramatic wealth effect on the way down. So if we've taken, now we've gotten maybe some of it back obviously but if you take 10 trillion dollars of market cap of valuation out of this stock market there's a broad impact that's probably remains to be seen. No. Well the wealth effect went from 50 trillion as of two weeks ago to 45 trillion. That's wealth creation since 2019. Checking accounts are four times higher today

also than where they were in 2019. So we have a nice bolster in terms of the background and in where we stand. Now, again, to me, the consumer backdrop that we're calling out calls for a winners and losers set up on retail. Retail relative to the consumer is not one for one. So while we have had a strong retail backdrop,

you've had bankruptcies in this space. We have 5,000 boxes that are up for grabs, given the consolidation and the tech sector with Amazon relative to the brick and mortar sector. That's not going away. And so the key now is to pick the opportunities. And that's where I was saying for value, it's off price retail and the discount space.

And then for opportunity, I think it's best in class brands. And I think that is what you saw during COVID. That is what you saw with the freight and some of the distribution challenges that we had back in 2018. And I think the playbook could look very similar where best in class brands take shelf space

and market share multi-year. You are nonetheless taking down some of your price targets. So while you still have great belief in the companies that you like, you're not naive to the effects of what is happening around you. Thus, you know, it's American Eagle, Abercrombie. I'm looking at everything in your coverage universe. Looks like it was reduced. Nearly across the board, Scott.

And the key to what we did, we maintained our fundamental view. And what I did is I backed tariffs, 145% for China, out of our price targets using the back equity value, meaning I took multiples from 2017 to 2019, which I view as the unemotional way of taking a backdrop for margins and top line. I regressed that against where we stand today. And then I took the tariff and sourcing exposures for each company and backed that out of our

fundamental price targets. But my point being is at our conference at our 11th annual retail roundup, only a week ago, the tone on core fundamentals from the companies that have been performing well, meaning the best in class brands, that would be a Levi, a Birkenstock, a Ralph Lauren, a Tapestry, that would be TJX, Burlington, the companies that stand for value, convenience and product improvement, in my opinion, have not seen a material change in business trends to date. I'll tell you what sticks out to me on your list, Lulu, because of rather de minimis reduction

in price target, two bucks. You have the stock overweight. We've discussed this stock on numerous occasions. Is the turnaround in full effect? So I think it is. The shame of it right now is you have seen a larger picture traffic headwind that right now has offset some of the material improvement that they've made in the U.S. But they have seen zero signs of slowing anywhere outside of the U.S.

And what's interesting, and they're not alone on this, I would put Birkenstock also in this as well as Amherst Sports. Remember, they are not a U.S.-based company, so they have exposure on the ground in China, but it's an important point to make. U.S. companies such as Nike potentially stand to face a nationalism concern over there, whereas a Lululemon Canadian-based Birkenstock that's Europe-based, as well as some other companies

operating within China, it's less of a concern. We'll see you soon. Matt, thank you. As always, Matthew Boss. Great to be back. Up next, we track the biggest movers as we head into this close. We'll be right back. All right, we're less than 15 from the bell back to Christina now for the stocks that

she is watching. Tell us. Well, Palantir is surging right now after it finalized the sale of an AI-enabled warfare system to NATO. The Maven Smart System will help Mano aggregate data from a multitude of sources to present really a common operating picture. Terms of the deal, though, were not disclosed. Palantir shares up almost 6% right now.

Some key pharma names climbing after Pfizer said it would end development of its experimental daily weight loss pills. It came after a patient experienced a liver injury that was potentially caused by the drug in a trial. Viking Therapeutics, which has its own experimental weight loss drug, seeing a big benefit from the news. You can see Viking up almost 11 percent, 10 and a half. Nova Nordis and Eli Lilly also higher by 3 percent. Scott? All right, Christina thanks. Christina Parts-Oval is still ahead. We'll tell you what's driving some big moves today in China Tech names.

We're back in the closing bell market zone. Giorgio Bossa brings us the latest big swings in Chinese tech stocks today. Leslie Picker on what to expect from those big bank earnings tomorrow. CNBC senior markets correspondent Bob Pizzani breaking down the crucial moments of this trading day into the close D. We begin with you. What's going on here? Yeah.

So Chinese names, they are outperforming the session. It has been a volatile past few weeks, but the ETF, the K web ETF outperforming the broader Nasdaq, Alibaba JD dot com. Also keep in mind, though, that these names have fallen a lot more relative. Our broader tech index over the last week amid that terror volatility. So this may just be a bounce direct tariff impact. Of course, it'll hit e commerce names like P. D. D. Holdings parent company of T. M. O., which sells into the U. S. But for today, at least some respite after a big sell-off over the past week. Zoom out even more though Scott this is worth mentioning Chinese tech names they are still performing better than our tech names on a

year-to-date basis thanks to the Chinese AI trade that DeepSeek sparked. Back to you. Okay Dee thank you dear Jebosa. The Leslie Picker on what now to expect tomorrow? Yes Scott tomorrow we get Bank of America and Citigr to both of the Leslie picker on what now to expect tomorrow Yes, Scott tomorrow We get Bank of America and Citigroup two of the better performers among the big banks today and the last two to report First-quarter results at least among the big six the market will be focused on what the earnings say about the state of the consumer And whether these two retail oriented firms are setting aside more for potential bad loans. Color from the firm's executives will also be critical in terms of whether they're seeing an impact on consumer spending, on credit quality and loan demand from the ongoing trade war. Also, the uncertainty surrounding rates and the yield curve will have an impact on the bank's

net interest income outlook. That's that profitability metric for loan making. And so far the big banks who have given guidance have held their full-year outlook or an even JP Morgan's case increased it slightly. So we'll see if that trend continues tomorrow Scott All right, Les. Thank you. That's Leslie picker. Papa's on and turn to you. We have we'll call two minutes You'll hear the animation in a moment We'll go out green today Not nearly as good. I think, as people expected, given some of the exceptions because of what happened over the weekend with the yes, the no, the this,

the that, and now the market is doing what it's doing today. I'll tell you what I like. Five to one advancing to declining stocks is great. Equal weight outperform. Banks, utilities, consumer staples, an odd group kind of outperforming here. Banks are kind of in the middle. The good news is we've regained two-thirds of the loss. Remember the market started April 3rd, started dropping on the tariff announcements. We've regained about

two-thirds of those losses since then. That's good news. I'll tell you what I don't like. I called my friends, trusted old friends over the weekend, utter cluelessness on earnings this year. Number one, on the level of earnings, we're expecting earnings to be up roughly 10% this year, $267. Forget about it. Nobody knows what the right number should be. Scott Cronert dropped his numbers at Citigroup to 255. So should it be up 5%, up 10%, up 0%? What's the right multiple? Right now we're trading at 20 times forward earnings.

That's a rich multiple. That implies growth in the economy and growth in earnings. That's not going to be happening likely. So should the correct number be 20 times forward, 18 times forward, and depending on what you get, right now we're at, you see 5,400. That's 20 times forward earnings. Look at these numbers here, up 10%, 267, a multiple 20,

you get 53, 40. But if you drop the earnings level just a little, instead of 10%, 5%, the multiple's 18, look, you get numbers that are way down there. And look at these numbers. You get a little more pessimistic. Start talking about a normal multiple of 17. You're down into the $4,000 level.

So nobody has an idea what the right numbers could be. That's why you're getting these wild dry raises. That's why everybody's a little bit nuts right now. Likely to continue, too. We'll get some more bank earnings tomorrow then we really get into the thick of it so we'll see. That's Fafazani. Thank you very much. I'll see you tomorrow.

I will send it into overtime now. We will be green across the board certainly off the best levels. OT with David Faber.